(Bloomberg) — Asian stocks fluctuated Monday amid some spikes in Covid-19 cases and U.S. equity futures edged lower as inflation concerns weighed further on investor sentiment. The dollar ticked higher.
Chinese stocks outperformed, shrugging off below-forecast economic readings. While European equity futures were in the green, U.S. contracts fell after Wall Street closed out a bruising week with a rally Friday. Japan retreated and Taiwan — one of the economies dealing with a virus flareup — tumbled.
The spread of the virus is front and center again in Asia as vaccinations lag the largest developed nations. Singapore will stop most school classes this week and Taiwan is racing to contain its worst outbreak. In contrast, the rolling one-week average of new U.S. cases fell to the lowest since June.
Treasury yields extended declines from Friday on a report that showed the recent surge in U.S. retail sales stalled in April. Most commodities opened the week on a steadier footing after last week’s volatility. Bitcoin traded below $44,000 after whipsawing over the weekend amid more comments from billionaire Elon Musk.
Concerns that policy makers will have to pull back support sooner than expected to quell rising inflation have weighed on global equities. Investors this week will parse the minutes from the Federal Open Market Committee’s latest meeting for any discussion about accelerating price pressures, and hints of a timeline for reducing asset purchases.
“The global economic recovery is well under way; that’s what’s fueling the inflation fears,” Olivier d’Assier, Qontigo head of APAC applied research, said on Bloomberg TV. It’s not surprising to see some profit taking after the rally in equity prices, d’Assier said.
The Federal Reserve’s policy is in a good place right now, said Cleveland Fed President Loretta Mester, while playing down data that she warns will be volatile as the economy reopens. Fed Vice Chair Richard Clarida and Atlanta Fed President Raphael Bostic are due to speak this week.
Click here for MLIV’s Question of the Day: How Far Can East-West Stocks Divergence Go?
Here are some key events this week:
Reserve Bank of Australia publishes minutes of its latest meeting TuesdayFed Vice Chair Richard Clarida and Atlanta Fed President Raphael Bostic are among policy makers speaking this weekThe Fed publishes minutes from its April meeting Wednesday, which may provide clues to officials’ views on the recovery and how they define “transitory” when it comes to inflation
These are some of the main moves in markets:
Stocks
S&P 500 futures dipped 0.2% as of 6 a.m. in London. The S&P 500 rose 1.5%Nasdaq 100 contracts edged down 0.2%. The Nasdaq 100 rose 2.2%Japan’s Topix Index fell 0.3%Australia’s S&P/ASX 200 Index added 0.3%South Korea’s Kospi index fell 0.7%Hong Kong’s Hang Seng Index rose 0.4%China’s Shanghai Composite Index gained 1%Euro Stoxx 50 futures rose 0.3%
Currencies
The yen traded at 109.40 per dollarThe offshore yuan was at 6.4418 per dollarThe Bloomberg Dollar Spot Index rose 0.2%The euro edged down to $1.2130
Bonds
The yield on 10-year Treasuries was around 1.62%Australia’s 10-year bond yield fell four basis points to 1.76%
Commodities
West Texas Intermediate crude was at $65.35 a barrelGold advanced 0.5% to $1,853.10
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